SYSOPENDIGIA PLC'S INTERIM REPORT FOR 1 JANUARY-30 JUNE 2007
Key figures in summary
January-June 2007
- Consolidated net sales: EUR 52.2 million, up 42 per cent year on year
- Pro forma growth in reported net sales: 3 per cent
- Consolidated operating profit: EUR 5.3 million, up 102 per cent year on year
- Pro forma growth in reported operating profit: 46 per cent
- Profitability (EBIT): 10.2 per cent
- Product business net sales accounted for 17.5 per cent, up 165 per cent
- Earnings per share: EUR 0.13 (Q1/2006: EUR 0.09)
- For the full-year 2007, the company continues to estimate its net sales to
amount to approximately EUR 100-105 million and profitability (EBIT) to 10-12
per cent.
April-June 2007
- Consolidated turnover: EUR 25.9 million, up 31 per cent year on year
- Pro forma growth in reported net sales: 3 per cent
- Consolidated operating profit: EUR 2.5 million, up 143 per cent year on year
- Pro forma growth in reported operating profit: 109 per cent
- Profitability (EBIT): 9.5 per cent
- Product business net sales accounted for 17.3 per cent, up 119 per cent
- Earnings per share: EUR 0.06 (Q2/2006: EUR 0.03)
BRIEFING FOR MEDIA AND ANALYSTS
SYSOPENDIGIA will hold a briefing for analysts and the media at the Scandic
Grand Marina hotel, Katajanokanlaituri 7, FI-00160 Helsinki, on 7 August 2007,
starting at 11:00 a.m., which will be broadcast live on the internet. A link to
the live broadcast will be available on SYSOPENDIGIA Plc's website at
www.sysopendigia.com.
CEO'S REVIEW
SYSOPENDIGIA'S employees have done a very good job throughout the reporting
period. Year on year, consolidated net sales for the period rose by 42 per cent
and, as a result of high operational efficiency, consolidated operating profit
improved by 102 per cent, or 10 per cent of net sales. Gearing was 68 per cent
and equity ratio stood at 44 per cent. Cash flow from operating activities was
positive by EUR 4.3 million. Diluted earnings per share were EUR 0.13. Growth in
earnings per share has been satisfactory, although the Group's financing costs
are having an impact on this.
The Telecommunications division reported a six per cent increase in net sales
and a 69 per cent improvement in operating profit. The Finance and Services
division posted a 40 per cent improvement in net sales but its profitability
weakened by 36 per cent. The Industry and Trade division showed an increase of
228 per cent in net sales and profitability improved markedly year on year.
We achieved our organic growth target for the period: our pro forma growth in
consolidated net sales was 3 per cent. Telecommunications recorded pro forma
growth of 6 per cent while that of Industry and Trade was 5 per cent. Finance
and Services' pro forma growth rate was 3 per cent in the red.
Our organic growth and profitability improved markedly during the first half of
the year, particularly in the Telecommunications and Industry and Trade
divisions. Thanks to the new customer project agreements signed during the
second quarter, the Finance and Services business is also expected to increase
its net sales and profitability during the second half of the year. Due to the
holiday season, second and third quarter net sales will be typically weaker than
the other quarters of the year.
During the reporting period, the product business accounted for 17.5 per cent of
consolidated net sales, a considerable increase year on year providing the
company with an excellent opportunity to assume total responsibility as the
supplier of systems supporting the customers' core processes.
SYSOPENDIGIA's customer relationships have developed very positively, and we
have achieved our goal of becoming a strategic partner for an increasing number
of customers in a number of major projects. In addition to this comprehensive
partnership strategy, our average project volume has increased, indicating our
capability of becoming a comprehensive supplier cooperating with strong
partners.
SYSOPENDIGIA is steadily evolving into a uniform company after the corporate and
organisational restructurings completed during the past two financial years. Our
operational efficiency has increased according to plan and the implementation of
shared operating policies and processes in all of the Group divisions will
further improve our operational efficiency during the second half of the year.
The percentage share of international operations has gradually grown in tandem
with Group growth, its volume already indicating a significant shift towards an
increasingly international business. Internationalisation is one of our key
goals in line with Group strategy.
With respect to the near future, cost and price pressures will continue in the
market. In this respect, it is of the utmost importance that we continuously
safeguard operational efficiency by implementing uniform operating models.
In accordance with our growth strategy for 2007, SYSOPENDIGIA's aim is to be the
number-one partner for its strategic customers in the supply of information
systems guiding their core processes and to establish significant new business
activities in the area of real-time information systems for companies.
SYSOPENDIGIA PLC'S INTERIM REPORT FOR 1 JANUARY-30 JUNE 2007
GROUP KEY FIGURES AND RATIOS
--------------------------------------------------------------------------------
| | Q2/200 | Q2/200 | Change | H1/2007 | H1/2006 | Change | 2006 |
| | 7 | 6 | ,% | | | ,% | |
--------------------------------------------------------------------------------
| Net sales | 25,903 | 19,760 | 31% | 52,182 | 36,686 | 42% | 84,968 |
--------------------------------------------------------------------------------
| Operating | 2,468 | 1,015 | 143% | 5,344 | 2,648 | 102% | 8,354 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| -% of net | 10% | 5% | | 10% | 7% | | 10% |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | 1,268 | 485 | 161% | 2,670 | 1,647 | 62% | 4,867 |
--------------------------------------------------------------------------------
| -% of net | 5% | 2% | | 5% | 4% | | 6% |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Return on | 8% | 3% | | 8% | 6% | | 8% |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| Return on | 9% | 5% | | 9% | 6% | | 9% |
| investment | | | | | | | |
--------------------------------------------------------------------------------
| Interest-be | 56,416 | 62,291 | -9% | 56,416 | 62,291 | -9% | 56,664 |
| aring | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Cash and | 12,843 | 16,334 | -21% | 12,843 | 16,334 | -21% | 11,506 |
| cash | | | | | | | |
| equivalents | | | | | | | |
--------------------------------------------------------------------------------
| Gearing,% | 68% | 77% | | 68% | 77% | | 72% |
--------------------------------------------------------------------------------
| Equity | 44% | 41% | | 44% | 41% | | 44% |
| ratio | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Earnings | 0.06 | 0.03 | 100% | 0.13 | 0.09 | 44% | 0.25 |
| per share, | | | | | | | |
| EUR, basic | | | | | | | |
--------------------------------------------------------------------------------
| Earnings | 0.06 | 0.02 | 200% | 0.13 | 0.08 | 63% | 0.25 |
| per share, | | | | | | | |
| EUR, | | | | | | | |
| diluted | | | | | | | |
--------------------------------------------------------------------------------
OVERVIEW OF BUSINESS SEGMENTS
Telecommunications
Telecommunications recorded a marked year-on-year improvement in its net sales
and profitability. This was attributable to successful investments in customer
relationships and offerings as well as the division's excellent project delivery
capacity during the period.
Market conditions were good for both the operator and smartphone business.
Customers' confidence in the company generated new projects, and its market
position remained strong. Markets are also expected to remain active during the
third quarter.
The activeness of operator customers in developing their operations and
offerings has provided Telecommunications with a number of major projects, thus
ensuring excellent prospects for the future too. The lively demand for
smartphones, combined with the offerings of the Telecommunications division,
provide excellent opportunities for a continued positive performance in this
business.
Finance and Services
Finance and Services reported a year-on-year growth of 40 per cent in net sales.
However, its profitability was weaker than a year earlier and pro forma growth
was negative during the reporting period.
The division successfully completed several sales projects initiated during the
first quarter. However, the major part of the work related to these projects
will not start until the end of the holiday season, due to which the related
positive effect is not reflected in the period's results. The growth in the
volume of new projects was also noteworthy.
With respect to Investment and Asset Management operations, net sales
development and operative profitability remained healthy. Co-operation was
initiated with Oy Samlink Ab on a service concept relating to systems that
support investment operations. As part of this cooperation, SYSOPENDIGIA will
replace Samlink's existing investment service systems with solutions
representing the Samstock by SYSOPENDIGIA product family.
The Finance and Services division signed a major three-year agreement with Arek
Oy on the supply of maintenance services for its earnings information system.
The agreement period commenced on 1 June 2007.
In the public sector segment, SYSOPENDIGIA participated in competitive bidding
for a framework agreement in technical consultancy for the Finnish Government
and was selected as the supplier in six of the eight possible sub-areas. This
will significantly improve our position as the supplier of consultancy services
for the state administration.
Industry and Trade
Industry and Trade reported year-on-year growth of 228 per cent, due not only to
the division's major restructuring measures but also to its positive business
performance. The division's operating profit also improved compared with the
same period a year ago.
The division finalised several enterprise resource planning (ERP) system
projects during the period, which was reflected in higher licensing income,
among other things. New projects were also initiated in this field. Overall, the
ERP business has continued to grow and accounts for an increasing proportion of
the entire Industry and Trade business. Business for other solutions continued
to grow steadily even though major new projects were not initiated during the
reporting period.
The ERP business continues to achieve the highest organic growth rate and we are
confident that this positive trend will continue in the latter part of the year.
The development of Web and integration solutions is also expected to boost
growth in these areas towards the end of the year.
MARKETS AND PROSPECTS
The annual growth estimate for the consulting and system integration market
varies between 2.3 and 6.4 per cent, depending on the market analyst (Gartner
2007, EITO and IDC 2006).
Customers require a reliable strategic partner capable of supplying
sophisticated solution packages and managing services throughout the lifecycle
of the customer's applications. The consolidation of various sectors, the
networking of value chains, the harmonisation of processes and the strengthening
of core partnerships to develop customer relationships will guide business
decisions.
ICT market demand is anticipated to focus on outsourcing, contract engineering,
extensive turnkey deliveries and the integration of standard software products.
Key value creators in near-future information system deliveries include business
focus and industry expertise, usability and the user interface, scalability and
the system's lifecycle as well as productivity and quality. Self-service and
service-chain digitisation and mobilisation will be emphasised in business
development.
Existing systems will be developed through portals, eBusiness solutions,
business intelligence and mobile solutions as well as RFID technology and
payment cards. Strategic development projects increasingly involve wireless and
mobile solutions based on the product platform architecture. The higher
penetration rate and maturement of smartphone and wireless technologies will
open up new, interesting business opportunities while the product development
market for smartphones will develop through consolidation, operating models
based on a full-responsibility concept, and alliances. SYSOPENDIGIA leads the
way as a supplier of wireless and mobile solutions integrated as part of
information systems related to its customers' core business.
The company aims to attain a significantly better position by 2010 as a supplier
of information technology systems and an outsourcing partner in Finland, and to
expand its domestic market to cover Northern Europe. SYSOPENDIGIA operates
globally in selected business areas and, during the strategy period, has the
goal of bolstering its offerings in the field of real‑time enterprise
information systems.
The Group adheres to its long-term target for average net sales growth of 25 per
cent. In 2007, the Group aims to continue its organic growth, and maintain
profitability at a healthy level. The Group regards growth as fundamental to
strengthening its market position, developing a sufficient range of products and
services, and providing services throughout the customer lifecycle. For the
full-year 2007, SYSOPENDIGIA continues to estimate its net sales to amount to
approximately EUR 100-105 million and profitability (EBIT rate) to 10-12 per
cent.
NET SALES
SYSOPENDIGIA's consolidated net sales for the period rose to EUR 52.2 million,
up by 42 per cent over the same period a year ago (H1/2006: EUR 36.7 million).
Net sales posted by Telecommunications improved to EUR 23.8 million, up by 6 per
cent year on year (H1/2006: EUR 22.5 million), while those by Finance and
Services totalled EUR 13.6 million, up by 40 per cent (H1/2006: EUR 9.7
million). Industry and Trade recorded net sales of EUR 14.8 million, up by 228
per cent (H1/2006: EUR 4.5 million).
SYSOPENDIGIA's consolidated net sales for the second quarter rose to EUR 25.9
million, up by 31 per cent year on year (Q2/2006: EUR 19.8 million).
Net sales of the Telecommunications division for the second quarter rose to EUR
12.0 million, up by 9 per cent year on year (Q2/2006: EUR 11.0 million), while
those by Finance and Services totalled EUR 6.7 million, up by 19 per cent
(Q2/2006: EUR 5.6 million). Industry and Trade recorded net sales of EUR 7.2
million for the second quarter, up by 130 per cent (Q2/2006: EUR 3.1 million).
During the reporting period, the product business accounted for EUR 9.1 million
(H1/2006: EUR 3.5 million) of consolidated net sales, or 17.5 per cent (H1/2006:
9.4 per cent). During the second quarter, the product business accounted for EUR
4.5 million (Q2/2006: EUR 2.0 million) of consolidated net sales, or 17.3 per
cent (Q2/2006: 10.4 per cent).
The pro forma figures include the net sales and operating profit of Sentera Oyj
and Samstock Oy as of 1 January 2006. Comparable consolidated pro forma net
sales in H1/2006 were EUR 50.6 million, showing year-on-year growth of 3 per
cent reported for H1/2007. Pro forma net sales by Telecommunications in H1/2006
were EUR 22.5 million, showing year-on-year growth of 6 per cent reported for
H1/2007. Pro forma net sales by Finance and Services in H1/2006 came to EUR 14.0
million, showing a year-on-year improvement of 3 per cent reported for H1/2007.
Pro forma net sales by Trade and Industry in H1/2006 amounted to EUR 14.1
million, showing year-on-year growth of 5 per cent for H1/2007.
Comparable consolidated pro forma net sales in Q2/2006 were EUR 25.3 million,
showing year-on-year growth of 3 per cent reported for Q2/2007. Pro forma net
sales by Telecommunications in Q2/2006 were EUR 11.0 million, showing
year-on-year growth of 9 per cent reported for Q2/2007. Pro forma net sales by
Finance and Services in Q2/2006 came to EUR 7.2 million, showing a year-on-year
decline of 7 per cent reported for Q2/2007. Pro forma net sales by Industry and
Trade in Q2/2006 amounted to EUR 7.0 million, showing year-on-year growth of 2
per cent for Q2/2007.
International operations accounted for 9.1 per cent of consolidated net sales
(H1/2006: 6.9 per cent).
PROFIT PERFORMANCE AND PROFITABILITY
SYSOPENDIGIA's consolidated operating profit (EBIT) for the reporting period
amounted to EUR 5.3 million, up 102 per cent on a year earlier (H1/2006: EUR 2.6
million).
Telecommunications reported an operating profit of EUR 2.9 million, representing
a year-on-year increase of 69 per cent (H1/2006: EUR 1.7 million). The business
segment's operating profit was burdened by a total of EUR 0.7 million in
amortisation on allocated goodwill resulting from the merger of SysOpen Plc and
Digia Inc. (H1/2006: EUR 0.7 million). Finance and Services showed an operating
profit of EUR 0.5 million, down by 36 per cent (H1/2006: EUR 0.8 million).
Industry and Trade posted an operating profit of EUR 2.0 million, representing a
marked increase over the same period a year ago (H1/2006: EUR 0.1 million).
SYSOPENDIGIA's consolidated operating profit (EBIT) for the second quarter
amounted to EUR 2.5 million, up 143 per cent on a year earlier (Q2/2006: EUR 1.0
million).
Telecommunications reported an operating profit of EUR 1.4 million, representing
a year-on-year increase of 121 per cent (Q2/2006: EUR 0.7 million). Finance and
Services showed an operating profit of EUR 0.4 million, up by 172 per cent
(Q2/2006: EUR 0.1 million). Finance and Services showed an operating profit of
EUR 0.7 million, representing a year-on-year increase of 191 per cent (Q2/2006:
EUR 0.2 million).
Reported earnings before tax were EUR 3.8 million (H1/2006: EUR 2.3 million) and
net profit totalled EUR 2.7 million (H1/2006: EUR 1.6 million).
Like-for-like consolidated pro forma operating profit in H1/2006 was EUR 3.7
million, showing year-on-year growth of 46 per cent reported for H1/2007. Pro
forma operating profit by Telecommunications in H1/2006 was EUR 1.7 million,
showing year-on-year growth of 69 per cent reported for H1/2007. Pro forma
operating profit by Finance and Services in H1/2006 came to EUR 0.6 million,
down by 16 per cent reported for H1/2007. Pro forma operating profit by Industry
and Trade in H1/2006 amounted to EUR 1.4 million, up by 44 per cent reported for
H1/2007.
Like-for-like consolidated pro forma operating profit in Q2/2006 was EUR 1.2
million, showing year-on-year growth of 109 per cent reported for Q2/2007. Pro
forma operating profit by Telecommunications in Q2/2006 was EUR 0.6 million,
showing year-on-year growth of 121 per cent reported for Q2/2007. Pro forma
operating profit by Finance and Services in Q2/2006 came to EUR 42 thousand,
showing a considerable increase of EUR 0.4 million reported for Q2/2007. Pro
forma operating profit by Industry and Trade in Q2/2006 amounted to EUR 0.5
million, up by 36 per cent for Q2/2007.
Earnings per share were EUR 0.13 (H1/2006: EUR 0.09). Earnings per share in
Q2/2007 were EUR 0.06 (Q2/2006: EUR 0.03).
The Group's net financial expenses totalled EUR 1.5 million (H1/2006: EUR 0.4
million).
FINANCIAL POSITION AND CAPITAL EXPENDITURE
On 30 June 2007, SYSOPENDIGIA's consolidated balance sheet total stood at EUR
146.7 million (31 December 2006: EUR 146.3 million) and equity ratio was 44 per
cent (31 December 2006: 44 per cent). Gearing stood at 68 per cent (31 December
2006: 72 per cent). The period-end cash and cash equivalents totalled EUR 12.8
million (31 December 2006: EUR 11.5 million) and interest-bearing liabilities
amounted to EUR 56.4 million (31 December 2006: EUR 56.7 million).
The Group annually carries out impairment tests for goodwill and intangible
assets with an indefinite useful life in accordance with the IAS 36 standard.
Goodwill has not been subject to amortisation since 1 January 2004, and residual
value is tested annually.
The table below shows goodwill and values subject to testing by business
segment:
--------------------------------------------------------------------------------
| EUR 1,000 | Allocate | Depreciat | Unallocate | Other | Total value |
| | d | ion | d goodwill | items | subject to |
| | goodwill | during | | | testing |
| | | the | | | |
| | | reporting | | | |
| | | period | | | |
--------------------------------------------------------------------------------
| Telecommunicati | 8,724 | 569 | 46,829 | 3,913 | 59,466 |
| ons | | | | | |
--------------------------------------------------------------------------------
| Finance and | 1,190 | 80 | 12,709 | 3,003 | 16,902 |
| Services | | | | | |
--------------------------------------------------------------------------------
| Industry and | 4,221 | 268 | 26,461 | 3,121 | 33,803 |
| Trade | | | | | |
--------------------------------------------------------------------------------
| Group total | 14,135 | 917 | 85,999 | 10,037 | 110,172 |
--------------------------------------------------------------------------------
Telecommunication's goodwill is mainly associated with the combination of Digia
Inc. and SysOpen Plc and the acquisition of Yomi Software Ltd which took place
in 2005. Finance and Services goodwill is mainly associated with the
acquisitions of Sentera Plc and Samstock Ltd in 2006. Industry and Trade
goodwill is mainly associated with the acquisitions of Sentera Plc and Yomi
Software Ltd.
The Group has defined its business segments as cash-generating units (CGU).
Testing goodwill for any impairment loss is based on comparing the present value
of the CGU's recoverable cash flows with the carrying amount. The present values
of cash flows are based on the continuous use of an asset, as well as the
financial plans and estimates of the CGU's future development approved by the
relevant CGU management.
Present values are determined on the basis of actual operating profit and
five-year forecasts by the CGU, with growth varying between three and eight per
cent and the operating margin between 10 and 13 per cent.
Cash flows following the forecast period are estimated by extrapolating the cash
flows using a steady net sales growth forecast of three per cent, with operating
profit estimated at 10 per cent of net sales. Discount rates have been
determined in view of the industry's general risk level, corresponding to an
annual interest rate of 11 per cent in 2006.
Net sales growth is reckoned to constitute the most critical factor in
calculating the present values of cash flows. The amount of goodwill for
Telecommunications requires average annual long-term growth of around two per
cent in its net sales and an operating margin of 10 per cent before amortisation
on allocated goodwill. The amount of goodwill for Finance and Services requires
average annual growth of two per cent in its net sales and an operating margin
of five per cent before amortisation on allocated goodwill. The amount of
goodwill for Industry and Trade requires average annual long-term growth of two
per cent in its net sales and an operating margin of nine per cent before
amortisation on allocated goodwill.
Based on a reasonable estimate, any change in key variables used in calculations
during the reporting period would not lead to a situation in which the segment's
carrying amount would exceed its recoverable amount. Consequently, in the
management's view, there is no need to recognise impairment losses.
Consolidated net cash flow from operating activities totalled EUR 4.3 million
(H1/2006: EUR 1.2 million).
Net investments in fixed assets came to EUR 1.0 million (H1/2006: EUR 0.7
million). Acquisitions of tangible fixed assets totalled EUR 0.6 million
(H1/2006: EUR 0.6 million).
Return on investment (ROI) stood at 9 per cent (H1/2006: 6 per cent) and return
on equity (ROE) at 8 per cent (H1/2006: 6 per cent).
RISK ASSESSMENT
Customer, personnel, project, data security, integration and goodwill risks
number among the key risks subject to monitoring in SYSOPENDIGIA's risk
management.
The company manages customer risks by actively developing its customer portfolio
structure and avoiding any potential risk positions. The customer portfolio's
structure and strategic customer relationships are expected to make progress in
2007 when the Group adopts shared customer relationship management processes and
operating models.
The Group assesses and manages personnel risks by carrying out quarterly
performance reviews with key personnel. With a view to enhancing employee
motivation and commitment, SYSOPENDIGIA has taken measures aimed at more
systematised and effective internal communication by staging monthly personnel
events and making the management more visible within the organisation. On the
basis of the results of a job satisfaction survey, the Group will develop its
internal policies and practices further, with the aim of improving working
conditions and job satisfaction. In addition, the Group will implement a
quarterly pulse method for job satisfaction measurement in all of its
businesses, in order to identify areas in need of immediate improvement.
The Group carries out project audits with a view to enhancing project risk
management and securing the success of project deliveries to customers. In
addition, the Group's certified quality management systems have undergone a
re‑evaluation and approval, and the Group has streamlined its project delivery
reporting procedures and plans further investments in order to ensure high
project delivery capacity and error-free projects.
In order to manage data-security risks, the Group carries out data-security
audits and is continuously developing operating models as well as practices and
processes that promote data security. The Management Group is tasked with
managing risks associated with the integration of businesses, shared operating
models and best practices, as well as their integrated development. The
integration of the corporate culture is an ongoing process and its successful
implementation requires sustained and determined efforts at all organisational
levels. With respect to IFRS‑compliant accounting policies, the Group actively
monitors goodwill and the related impairment tests as part of prudent and
proactive risk management practices within financial management.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
On 30 June 2007, the number of Group employees totalled 1,122, up by 35, or 3.2
per cent, from the staff number on 31 December 2006 (2006: 1,087). During the
reporting period, the number of employees averaged 1,099, showing an increase of
118, or 12.0 per cent (2006: 981) over the same period a year ago.
Reported cumulative employee turnover came to 5.7 per cent (H1/2006: 3.2 per
cent).
Employees by function on 30 June 2007:
--------------------------------------------------------------------------------
| Telecommunications | 48% |
--------------------------------------------------------------------------------
| Finance and Services | 25% |
--------------------------------------------------------------------------------
| Industry and Trade | 22% |
--------------------------------------------------------------------------------
| Administration and management | 5% |
--------------------------------------------------------------------------------
On 30 June 2007, one per cent of SYSOPENDIGIA's personnel worked abroad.
The Annual General Meeting (AGM) of 28 February 2007 elected the following Board
members: Pekka Sivonen (Chairman), Pertti Kyttälä (Vice Chairman), Kari
Karvinen, Matti Mujunen, Mikko Terho, Eero Makkonen and Martti Mehtälä. Jari
Mielonen acts as the Group's CEO and Seppo Laaksonen is his deputy. On 21 March
2007, Mikko Terho resigned from SYSOPENDIGIA Plc's Board of Directors for
personal reasons.
The AGM re-elected KPMG Oy Ab, a firm of authorised public accountants, as the
Group's auditor, with Ari Ahti, Authorised Public Accountant, as the chief
auditor.
CORPORATE AND BUSINESS ACQUISITIONS
The reporting period saw neither corporate nor business acquisitions.
The arbitral tribunal appointed by the Redemption Committee of the Central
Chamber of Commerce confirmed in its arbitration award rendered on 30 April 2007
that the fair price of the shares in SYSOPENDIGIA Plc's subsidiary SysOpen Digia
Industry and Trade Ltd (former Sentera Plc) referred to in Chapter 14, Section
19 of the Finnish Companies Act (29.9.1978/734), i.e. the redemption price, is
EUR 3.20 per share. This was also SYSOPENDIGIA's voluntary redemption offer.
The arbitral tribunal confirmed in the arbitration award that the interest to be
paid on the redemption price is an annual interest of 6.0 per cent from 26
September 2006 until the redemption price has been finally determined. On 23
July 2007, the redemption price was paid to those entitled to it.
GROUP STRUCTURE AND ORGANISATION
On 31 March 2007, SYSOPENDIGIA Group consisted of SYSOPENDIGIA Plc, the parent
company, and the following active subsidiaries: SysOpen Digia Integration Ltd
(parent company holding: 100 per cent), SysOpen Digia Smartphone Ltd (100 per
cent), SysOpen Digia Industry and Trade Ltd (100 per cent), SYSOPENDIGIA
Financial Software Ltd (100 per cent) and SysOpen Digia Object Team Ltd (100 per
cent). In addition, SysOpen Digia Integration Ltd has a wholly owned active
subsidiary, SysOpen Digia Service Ltd.
SYSOPENDIGIA has begun to simplify its Group structure. Its active subsidiaries
SysOpen Digia Integration Ltd, SysOpen Digia Smartphone Ltd, SYSOPENDIGIA
Financial Software Ltd and SysOpen Digia Object Team Ltd will merge with SysOpen
Digia Industry and Trade Ltd. With the merger process underway, the companies
should merge on 31 October 2007. In addition, based on voluntary liquidation,
SYSOPENDIGIA has dissolved the following inactive subsidiaries: SysOpen Digia
Design Ltd, SysOpen Digia Tools Ltd, Digivision Ltd and SysOpen Digia Project
Ltd.
SYSOPENDIGIA has a common Group administration and the Group's business is
divided into the following three business divisions: Telecommunications, Finance
and Services, and Trade and Industry.
EVENTS AFTER THE BALANCE SHEET DATE
No significant events.
ANNUAL GENERAL MEETING
Annual General Meeting on 28 February 2007
Convened on 28 February 2007, SYSOPENDIGIA Plc's Annual General Meeting (AGM)
adopted the financial statements for 2006, discharged Board members and the CEO
from liability and, as proposed by the Board of Directors, approved the profit
distribution for 2006, determined Board emoluments and elected the company's
Board of Directors for a new term. In addition, the AGM decided to alter the
Articles of Association throughout, which also resulted in a new company name,
SYSOPENDIGIA Plc.
The AGM also decided on the following Board authorisations:
1. The AGM authorised the Board of Directors to decide on a rights issue or a
capitalisation issue on the following terms and conditions:
- The authorisation is valid for 18 months from the issue date of the
authorisation, or until 28 August 2008;
- On the basis of the share issue authorisation and/or the authorisation for an
issue of special rights, as proposed below, the Company may, in one or several
tranches, issue shares or dispose of treasury shares held by the Company, their
combined number not exceeding 4,000,000, which accounts for roughly twenty
percent of the Company's issued and outstanding shares; and
- The Board of Directors is otherwise authorised to decide on all terms and
conditions of the share issue, including the right to decide on a private
placement and to exercise the authorisation for the purpose of motivating and
incentivising Group key employees.
2. The AGM authorised the Board to decide on issuing special rights, entitling
their holders to receive against payment new Company shares or any treasury
shares held by the Company, on the following terms and conditions:
- The authorisation is valid for 18 months from the issue date of the
authorisation, or until 28 August 2008;
- On the basis of this authorisation, the Company may, in one or several
tranches, issue special rights not exceeding the number of shares as stated
above with respect to the share issue authorisation; and
- The Board of Directors is otherwise authorised to decide on other terms and
conditions of the special rights, including the right to decide on issuing said
special rights on a private placement basis and to exercise the authorisation
for the purpose of motivating and incentivising Group key employees.
3. The AGM authorised the Board to decide on buying back own shares on the
following terms and conditions:
- The authorisation is valid for 18 months from the issue date of the
authorisation, or until 28 August 2008;
- On the basis of the authorisation, the Company may, in one or several
tranches, buy back a maximum of 2,000,000 own shares;
- The shares shall be bought back for the value determined by the Board of
Directors, based on the fair value quoted in public trading on the buyback date;
- Only unrestricted equity may be used to buy back own shares; and
- The Board of Directors is otherwise authorised to decide on other terms and
conditions of the buyback of own shares, including the right to decide on buying
back own shares in a proportion other than that of the shares held by Company
shareholders.
BOARD COMMITTEES
SYSOPENDIGIA's Board of Directors comprises two committees: the Compensation
Committee and the Audit Committee.
Tasked with preparing remuneration schemes and monitoring their effectiveness
in meeting Group targets, safeguarding objective decision-making and securing
transparent and systematic remuneration schemes, the Compensation Committee
comprises Pekka Sivonen (Chairman), Kari Karvinen and Martti Mehtälä. It held
three meetings during the reporting period.
The Audit Committee assists the Board of Directors in ensuring that the
company's financial reporting, accounting methods, financial statements and
other financial information provided by the company are balanced, transparent
and unambiguous. Comprising the non-executive Board members Pertti Kyttälä
(Chairman), Matti Mujunen and Eero Makkonen, the Audit Committee held two
meetings during the reporting period.
SHARE CAPITAL AND SHARES
On 30 June 2007, the number of company shares totalled 20,319,351 and the number
of shareholders 3,365. The ten largest shareholders:
--------------------------------------------------------------------------------
| Shareholder | Shareholding and votes |
--------------------------------------------------------------------------------
| Pekka Sivonen | 13.9% |
--------------------------------------------------------------------------------
| Evli Bank Plc | 7.8% |
--------------------------------------------------------------------------------
| Kari Karvinen | 7.8% |
--------------------------------------------------------------------------------
| Matti Savolainen | 6.5% |
--------------------------------------------------------------------------------
| OP-Suomi Pienyhtiöt mutual fund | 5.3% |
--------------------------------------------------------------------------------
| Nordea Bank Finland Plc | 4.3% |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 3.7% |
--------------------------------------------------------------------------------
| Veikko Laine Oy | 2.9% |
--------------------------------------------------------------------------------
| Skandinaviska Enskilda Banken | 2.5% |
--------------------------------------------------------------------------------
| Jorma Kylätie's estate | 2.2% |
--------------------------------------------------------------------------------
Shareholding by number of shares held on 30 June 2007
--------------------------------------------------------------------------------
| Number of shares | Percentage of | Shareholding and |
| | holdings | votes |
--------------------------------------------------------------------------------
| 1 - 100 | 23.5% | 0.3% |
--------------------------------------------------------------------------------
| 101 - 1,000 | 53.3% | 4.2% |
--------------------------------------------------------------------------------
| 1,001 - 10,000 | 19.9% | 9.5% |
--------------------------------------------------------------------------------
| 10,001 - 100,000 | 2.6% | 13.0% |
--------------------------------------------------------------------------------
| 100,001 - 1,000,000 | 0.6% | 31.7% |
--------------------------------------------------------------------------------
| 1,000,001 - 3,000,000 | 0.1% | 41.3% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total number of shares: 20,319,351 | | |
--------------------------------------------------------------------------------
Shareholding by sector on 30 June 2007
--------------------------------------------------------------------------------
| | Percentage of | Percentage of |
| | holdings | shares |
--------------------------------------------------------------------------------
| Non-banking corporate sector | 6.3% | 10.8% |
--------------------------------------------------------------------------------
| Financial institutions and | 0.6% | 27.3% |
| insurance companies | | |
--------------------------------------------------------------------------------
| Public-sector entities | 0.1% | 3.8% |
--------------------------------------------------------------------------------
| Non-profit organisations | 0.4% | 0.6% |
--------------------------------------------------------------------------------
| Households | 92.1% | 56.1% |
--------------------------------------------------------------------------------
| Foreign holding | 0.5% | 1.4% |
--------------------------------------------------------------------------------
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
SYSOPENDIGIA Plc shares are listed on the Nordic Exchange under Information
Technology IT Services. The company's short name is SYS1V. During the reporting
period, the company's share registered a low of EUR 3.37, a high of EUR 4.26 and
closed at EUR 4.20 on the period's last trading day. The share's trade weighted
average price amounted to EUR 3.82. On 30 June 2007, the company's market
capitalisation totalled EUR 83,309,339.
During the reporting period, the following notification in accordance with
Chapter 2, Section 10 of the Securities Market Act was brought to the company's
attention:
Osuuspankkikeskus Osk ("OPK") informed SYSOPENDIGIA on 11 May 2007 that the
ownership share of SYSOPENDIGIA Plc's votes and share capital by investment
funds of OPK's subsidiaries has increased to over one twentieth (1/20).
Altogether, OPK and the entities OPK has control over 1,101,958 shares of
SYSOPENDIGIA, corresponding to 5.43 per cent of SYSOPENDIGIA's shares and votes.
STOCK OPTION SCHEMES
Stock option scheme 2003
Under the 2003 stock option scheme, the number of warrants originally issued
totals 670,000 as follows: 210,000 warrants under 2003A, 160,000 warrants under
2003B, 150,000 warrants under 2003C and 150,000 warrants under 2003D. All of the
warrants have been exercised for subscription.
The share subscription period for the 2003A warrants was between 2 May 2004 and
31 October 2005 (expired), and for the 2003B warrants between 1 November 2004
and 31 October 2006 (expired), and the share subscription period for the 2003C
warrants is between 1 November 2005 and 31 October 2007 and for the 2003D
warrants between 1 November 2006 and 31 October 2008. The current
dividend‑adjusted share subscription price for 2003C is EUR 3.62 per share, and
for 2003D EUR 4.19 per share. Dividends paid will be deducted from the
subscription prices in accordance with the terms and conditions of the scheme.
On 30 June 2007, SysOpen Partners Oy, a SYSOPENDIGIA Plc wholly owned
subsidiary, held a total of 47,582 stock options under the 2003 stock option
scheme. Warrants within the 2003C scheme have been listed on the Helsinki Stock
Exchange since 1 November 2005 and those within 2003D since 15 November 2006.
By 30 June 2007, 316,429 new shares had been subscribed for under the 2003 stock
option scheme. The shares were subscribed for using 172,515 of now already
expired 2003A warrants, 143,114 of the now expired 2003B warrants, and 800 of
the 2003C warrants.
Stock option scheme 2005K
Under the 2005K stock option scheme, the number of warrants originally issued
totals 663,049, 105,408 of which were marked with 2005K1 and 557,641 with
2005K2. All of the warrants have been exercised for subscription. The warrants
entitle their holders to subscribe for a maximum total of 663,049 SYSOPENDIGIA
Plc shares.
The share subscription price for 2005K1 warrants was EUR 1.21 and, for 2005K2
warrants, it is EUR 2.28 (dividend‑adjusted). On each dividend record date, the
share subscription price based on the stock options will be deducted by the
amount of dividends decided after 1 June 2005 and before the share subscription.
The share subscription period for the 2005K1 warrants began on 12 August 2005,
when the 2005K warrants were registered in the Trade Register, and will end on
31 December 2007. The share subscription period for the 2005K2 warrants began on
1 January 2006 and will end on 31 December 2007. The 2005K1 warrants entitle
their holders to use them only for share subscriptions. On 30 June 2007, SysOpen
Digia Partners Ltd, a SYSOPENDIGIA Plc wholly owned subsidiary, held a total of
5,657 warrants under the 2005K2 stock option scheme.
All of the 2005K1 warrants (105,408 warrants) have been exercised to subscribe
for shares. By 30 June 2007, 16,312 new shares had been subscribed for under the
2005K2 stock option scheme. Warrants within the 2005K2 stock option scheme have
been quoted on the Helsinki Stock Exchange since 2 January 2006.
Stock option scheme 2005
The number of warrants under the 2005 stock option scheme totals 900,000,
300,000 of which are marked with 2005A, 300,000 with 2005B and 300,000 with
2005C. The warrants entitle their holders to subscribe for a maximum total of
900,000 SYSOPENDIGIA Plc shares.
The share subscription price for the 2005A warrants is EUR 4.20
(dividend‑adjusted) and for the 2005B warrants it is EUR 3.90. The share
subscription price for the 2005C warrants is determined by the trade‑weighted
average price of a SYSOPENDIGIA Plc share quoted on the Helsinki Stock Exchange
during the 20 trading days following the release of the Q1/2007 Interim Report.
On each dividend record date, the share subscription price based on the stock
options will be deducted by the amount of dividends for which the decision to
distribute has been made between the beginning of the share price determination
period and the date of share subscription. The share subscription period for the
2005A warrants will be between 1 November 2007 and 30 November 2009, for the
2005B warrants between 1 November 2008 and 30 November 2010 and for the 2005C
warrants between 1 November 2009 and 30 November 2011. As a result of the share
subscriptions based on the 2005A, 2005B and 2005C warrants, SYSOPENDIGIA Plc's
share capital may increase by a maximum of EUR 90,000, and the number of shares
by a maximum of EUR 900,000 new shares. On 30 June 2007, SysOpen Digia Partners
Ltd, a SYSOPENDIGIA Plc wholly owned subsidiary, held a total of 534,000
warrants under the 2005 stock option scheme.
On 30 June 2007, the number of all remaining stock options issued by
SYSOPENDIGIA totalled 1,740,529. Shares to be subscribed using warrants account
for a maximum of 7.89 per cent of company shares and voting rights, as a result
of any possible increase of the company's share capital. On 30 June 2007, the
number of warrants held by SysOpen Digia Partners totalled 587,239 of all valid
warrants. On 30 June 2007, the maximum dilution effect of the issued warrants
was 5.37 per cent.
Helsinki, 7 August 2007
SYSOPENDIGIA PLC
Board of Directors
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jari Mielonen, President and CEO,
tel. +358 40 703 8383, e-mail: jari.mielonen@sysopendigia.com
The Interim Report will be available, and the related live briefing for the
media and analysts will be held in Finnish, in the ‘Investors' section at
www.sysopendigia.fi starting at 11.00 a.m.
DISTRIBUTION
Helsinki Stock Exchange
Major media
APPENDICES
Consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in shareholders' equity
Notes to the accounts
This Interim Report has been prepared in accordance with the IAS 34 Interim
Financial Reporting standard insofar as approved for implementation within the
EU. This Interim Report is based on unaudited figures.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| | Q2/200 | Q2/200 | Chan | H1/2007 | H1/2006 | Chang | 2006 |
| | 7 | 6 | ge,% | | | e,% | |
--------------------------------------------------------------------------------
| Net sales | 25,903 | 19,760 | 31% | 52,182. | 36,686. | 42% | 84,968. |
| | .1 | .4 | | 0 | 3 | | 1 |
--------------------------------------------------------------------------------
| Other | 80.3 | 24.3 | 230% | 203.7 | 59.7 | 241% | 280.2 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Materials and | -1,755 | -1,032 | 70% | -3,678. | -1,588. | 131% | -4,699. |
| services | .9 | .9 | | 2 | 9 | | 6 |
--------------------------------------------------------------------------------
| Depreciation, | -1,159 | -1,059 | 9% | -2,429. | -1,972. | 23% | -4,557. |
| amortisation | .6 | .6 | | 7 | 2 | | 3 |
| and | | | | | | | |
| impairment | | | | | | | |
| losses | | | | | | | |
--------------------------------------------------------------------------------
| Other | -20,59 | -16,67 | 24% | -40,933 | -30,536 | 34% | -67,637 |
| operating | 9.8 | 7.7 | | .6 | .5 | | .4 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 2,468. | 1,014. | 143% | 5,344.3 | 2,648.4 | 102% | 8,354.1 |
| profit | 0 | 5 | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Financial | -733.8 | -355.9 | 106% | -1,524. | -393.8 | 287% | -1,659. |
| expenses | | | | 2 | | | 3 |
| (net) | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Earnings | 1,734. | 658.6 | 163% | 3,820.1 | 2,254.6 | 69% | 6,694.8 |
| before tax | 3 | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -465.8 | -173.2 | 169% | -1,149. | -607.6 | 89% | -1,827. |
| expense | | | | 9 | | | 6 |
--------------------------------------------------------------------------------
| Net profit | 1,268. | 485.4 | 161% | 2,670.2 | 1,647.1 | 62% | 4,867.2 |
| | 6 | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Attributable | | | | | | | |
| to: | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 1,268. | 479.6 | 165% | 2,670.2 | 1,637.6 | 63% | 4,854.1 |
| holders of | 6 | | | | | | |
| the parent | | | | | | | |
| company | | | | | | | |
--------------------------------------------------------------------------------
| Minority | 0.0 | 5.8 | -100 | 0.0 | 9.5 | -100% | 13.1 |
| interest | | | % | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Basic | 0.06 | 0.03 | 100% | 0.13 | 0.09 | 44% | 0.25 |
| earnings per | | | | | | | |
| share (EUR) | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.06 | 0.02 | 200% | 0.13 | 0.08 | 63% | 0.25 |
| share, | | | | | | | |
| diluted (EUR) | | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
--------------------------------------------------------------------------------
| Assets | 30 June 2007 | 31 Dec. 2006 | Change,% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Intangible assets | 102,005.2 | 103,210.0 | -1% |
--------------------------------------------------------------------------------
| Property, plant and | 3,034.4 | 3,251.6 | -7% |
| equipment | | | |
--------------------------------------------------------------------------------
| Investments | 608.4 | 608.4 | 0% |
--------------------------------------------------------------------------------
| Deferred tax assets | 4,053.0 | 2,909.9 | 39% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total non-current assets | 109,701.0 | 109,979.9 | 0% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Current | 24,128.4 | 24,836.9 | -3% |
--------------------------------------------------------------------------------
| Available-for-sale | 2,782.9 | 2,778.3 | 0% |
| financial assets | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 10,060.0 | 8,727.3 | 15% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total current assets | 36,971.3 | 36,342.5 | 2% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total assets | 146,672.3 | 146,322.4 | 0% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and | 30 June 2007 | 31 Dec. 2006 | Change,% |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Share capital | 2,031.9 | 2,031.2 | 0% |
--------------------------------------------------------------------------------
| Share premium | 6,746.3 | 6,729.5 | 0% |
--------------------------------------------------------------------------------
| Other reserves | 5,203.8 | 5,203.8 | 0% |
--------------------------------------------------------------------------------
| Unrestricted invested | 39,735.5 | 39,735.5 | 0% |
| shareholders' equity | | | |
--------------------------------------------------------------------------------
| Fair value reserve | - | - | 0% |
--------------------------------------------------------------------------------
| Translation difference | - | -6.6 | -100% |
--------------------------------------------------------------------------------
| Retained earnings | 7,808.7 | 4,458.0 | 75% |
--------------------------------------------------------------------------------
| Net profit | 2,670.2 | 4,854.1 | -45% |
--------------------------------------------------------------------------------
| Capital and reserves | 64,196.4 | 63,005.6 | 2% |
| attributable to equity | | | |
| holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | 113.8 | -100% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total shareholders' equity | 64,196.4 | 63,119.4 | 2% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Non-current | 56,002.4 | 56,081.5 | 0% |
| interest‑bearing | | | |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 3,596.8 | 3,822.3 | -6% |
--------------------------------------------------------------------------------
| Total non-current | 59,599.2 | 59,903.8 | -1% |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | 414.0 | 582.6 | -29% |
| liabilities | | | |
--------------------------------------------------------------------------------
| Other current liabilities | 22,462.7 | 22,716.7 | -1% |
--------------------------------------------------------------------------------
| Total current liabilities | 22,876.8 | 23,299.2 | -2% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total liabilities | 82,475.9 | 83,203.0 | -1% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Shareholders' equity and | 146,672.3 | 146,322.4 | 0% |
| liabilities | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| Cash flow from operating | 1 Jan. 2007 | 1 Jan. 2006 | 1 Jan. 2006 - |
| activities: | - 30 June | - 30 June | 31 Dec. 2006 |
| | 2007 | 2006 | |
--------------------------------------------------------------------------------
| Net profit | 2,670 | 1,638 | 4,854 |
--------------------------------------------------------------------------------
| Adjustments to net profit | 5,206 | 3,121 | 8,323 |
--------------------------------------------------------------------------------
| Change in net working capital | -1,270 | -2,489 | -4,093 |
--------------------------------------------------------------------------------
| Interest paid | -1,427 | -420 | -1,917 |
--------------------------------------------------------------------------------
| Interest received | 90 | 75 | 271 |
--------------------------------------------------------------------------------
| Income tax paid | -956 | -731 | -1,682 |
--------------------------------------------------------------------------------
| Net cash flow from operating | 4,312 | 1,194 | 5,756 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flows from investing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
| Purchases of intangible assets | -1,008 | -709 | -1,876 |
| and property, plant and | | | |
| equipment (PPE) | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of | 0 | 376 | 376 |
| intangible assets and PPE | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiary, net | -209 | -31,701 | -34,229 |
| of cash acquired | | | |
--------------------------------------------------------------------------------
| Proceeds of sale of other | 0 | | -1 |
| investments | | | |
--------------------------------------------------------------------------------
| Dividends received | 0 | | 12 |
--------------------------------------------------------------------------------
| Net cash used in investing | -1,217 | -32,033 | -35,718 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | 17 | 26 | 320 |
--------------------------------------------------------------------------------
| Repayment of current loans | 0 | | -41,208 |
--------------------------------------------------------------------------------
| Repayments of non-current loans | -150 | -2,083 | -21,875 |
--------------------------------------------------------------------------------
| Proceeds from current loans | 0 | 37,768 | 38,000 |
--------------------------------------------------------------------------------
| Proceeds from non-current loans | 0 | | 55,000 |
--------------------------------------------------------------------------------
| Dividends paid and other | -1,625 | -698 | -930 |
| distribution of profit | | | |
--------------------------------------------------------------------------------
| Net cash used in financing | -1,758 | 35,013 | 29,307 |
| activities | | | |
--------------------------------------------------------------------------------
| | 0 | | |
--------------------------------------------------------------------------------
| Net change in cash and cash | 1,337 | 4,174 | -655 |
| equivalents | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 11,505 | 12,326 | 12,326 |
| period-start | | | |
--------------------------------------------------------------------------------
| Change in fair value of cash | 0 | -166 | -166 |
| and cash equivalents | | | |
--------------------------------------------------------------------------------
| Net change in cash and cash | 1,337 | 4,174 | -655 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 12,842 | 16,333 | 11,505 |
| period-end | | | |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g | h |
--------------------------------------------------------------------------------
| Balance 1 | 1,84 | 39,7 | 5,204 | 23 | 166 | 5,128 | 111 | 52,189 |
| Jan. 2006 | 0 | 18 | | | | | | |
--------------------------------------------------------------------------------
| Available‑ | | | | | | | | 0 |
| for‑sale | | | | | | | | |
| investment | | | | | | | | |
| s: | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | | | -166 | | | -166 |
| gains/loss | | | | | | | | |
| es | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | 137 | 0 | 137 |
--------------------------------------------------------------------------------
| Items | | 0 | 0 | 0 | -166 | 137 | 0 | -29 |
| recognised | | | | | | | | |
| directly | | | | | | | | |
| in equity | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 1,638 | 10 | 1,647 |
--------------------------------------------------------------------------------
| Total | 0 | 0 | 0 | 0 | 0 | 1,638 | 10 | 1,647 |
| recognised | | | | | | | | |
| income and | | | | | | | | |
| expenses | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Increase | 181 | 6,44 | | | | | | 6,622 |
| of share | | 1 | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Distributi | | | | | | -920 | -10 | -930 |
| on of | | | | | | | | |
| dividends | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | -23 | | -2 | | -25 |
--------------------------------------------------------------------------------
| BALANCE 30 | 2,02 | 46,1 | 5,204 | 0 | 0 | 5,982 | 110 | 59,474 |
| JUNE 2006 | 1 | 59 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g | h |
--------------------------------------------------------------------------------
| Balance 1 | 2,03 | 6,72 | 44,93 | 0 | 0 | 9,305 | 114 | 63,119 |
| Jan. 2007 | 1 | 9 | 9 | | | | | |
--------------------------------------------------------------------------------
| Available‑ | | | | | | | | 0 |
| for‑sale | | | | | | | | |
| investment | | | | | | | | |
| s: | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | | | | | | 0 |
| gains/loss | | | | | | | | |
| es | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | 103 | | 103 |
--------------------------------------------------------------------------------
| Items | 0 | 0 | 0 | 0 | 0 | 103 | 0 | 103 |
| recognised | | | | | | | | |
| directly | | | | | | | | |
| in equity | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 2,670 | 0 | 2,670 |
--------------------------------------------------------------------------------
| Total | 0 | 0 | 0 | 0 | 0 | 2,773 | 0 | 2,773 |
| recognised | | | | | | | | |
| income and | | | | | | | | |
| expenses | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Increase | 0 | 17 | | | | | | 17 |
| of share | | | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Distributi | | | | | | - | | -1,625 |
| on of | | | | | | 1,625 | | |
| dividends | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | 25 | -114 | -88 |
--------------------------------------------------------------------------------
| BALANCE 30 | 2,03 | 6,74 | 44,93 | 0 | 0 | 10,479 | 0 | 64,196 |
| JUNE 2007 | 1 | 6 | 9 | | | | | |
--------------------------------------------------------------------------------
a = Share capital
b = Share premium
c = Other reserves and invested unrestricted equity
d = Currency translation differences
e = Fair value reserve
f = Retained earnings
g = Minority interest
h = Total shareholders' equity
NOTES TO THE ACCOUNTS
Accounting principles:
The accounting principles and calculation methods used in the previous year-end
accounts have been applied to this Interim Report.
Seasonal nature of business:
The Group's business is affected by the number of workdays each month as well as
holiday seasons.
Dividends paid:
A per-share dividend of EUR 0.08, or a total of EUR 1,624,985.44, was paid based
on the decision of the AGM of 28 February 2007. The dividend payment date was 9
March 2007.
Segment information:
--------------------------------------------------------------------------------
| NET SALES, EUR | Q2/20 | Q2/20 | Change | H1/200 | H1/200 | Change | 1-12/2 |
| 1,000 | 07 | 06 | ,% | 7 | 6 | ,% | 006 |
--------------------------------------------------------------------------------
| Telecommunicati | 12,02 | 11,00 | 9% | 23,823 | 22,492 | 6% | 43,618 |
| ons | 5 | 1 | | | | | |
--------------------------------------------------------------------------------
| Finance and | 6,710 | 5,643 | 19% | 13,572 | 9,689 | 40% | 23,633 |
| Services | | | | | | | |
--------------------------------------------------------------------------------
| Industry and | 7,168 | 3,116 | 130% | 14,787 | 4,505 | 228% | 17,717 |
| Trade | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 25,90 | 19,76 | 31% | 52,182 | 36,686 | 42% | 84,968 |
| | 3 | 0 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING | Q2/20 | Q2/20 | Change | H1/200 | H1/200 | Change | 1-12/2 |
| PROFIT, EUR | 07 | 06 | ,% | 7 | 6 | ,% | 006 |
| 1,000 | | | | | | | |
--------------------------------------------------------------------------------
| Telecommunicati | 1,437 | 651 | 121% | 2,876 | 1,702 | 69% | 4,018 |
| ons | | | | | | | |
--------------------------------------------------------------------------------
| Finance and | 368 | 136 | 172% | 513 | 797 | -36% | 2,322 |
| Services | | | | | | | |
--------------------------------------------------------------------------------
| Industry and | 663 | 228 | 191% | 1,955 | 149 | 1216% | 2,014 |
| Trade | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 2,468 | 1,014 | 143% | 5,344 | 2,648 | 102% | 8,354 |
--------------------------------------------------------------------------------
Events after the balance sheet date:
There have been no significant events after the end of the reporting period.
Consolidated income statement by quarter:
--------------------------------------------------------------------------------
| EUR 1,000 | Q2/2007 | Q1/2007 | Q4/2006 | Q3/2006 | Q2/2006 |
--------------------------------------------------------------------------------
| Net sales | 25,903.1 | 26,278.9 | 26,620.8 | 21,661.0 | 19,760.4 |
--------------------------------------------------------------------------------
| Other operating | 80.3 | 123.4 | 80.1 | 140.5 | 24.3 |
| income | | | | | |
--------------------------------------------------------------------------------
| Materials and | -1,755.9 | -1,922.2 | -1,939.8 | -1,170.9 | -1,032.9 |
| services | | | | | |
--------------------------------------------------------------------------------
| Depreciation, | -1,159.6 | -1,270.1 | -1,304.1 | -1,280.9 | -1,059.6 |
| amortisation and | | | | | |
| impairment losses | | | | | |
--------------------------------------------------------------------------------
| Other operating | -20,599.8 | -20,333.8 | -20,471.5 | -16,629. | -16,677.7 |
| expenses | | | | 4 | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 2,468.0 | 2,876.2 | 2,985.4 | 2,720.3 | 1,014.5 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Financial | -733.8 | -790.4 | -646.6 | -618.9 | -355.9 |
| expenses (net) | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
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| Earnings before | 1,734.3 | 2,085.8 | 2,338.8 | 2,101.3 | 658.6 |
| tax | | | | | |
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| | | | | | |
--------------------------------------------------------------------------------
| Income tax | -465.8 | -684.1 | -713.5 | -506.6 | -173.2 |
| expense | | | | | |
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| Net profit | 1,268.6 | 1,401.6 | 1,625.3 | 1,594.8 | 485.4 |
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| | | | | | |
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| Attributable to: | | | | | |
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| Equity holders of | 1,268.6 | 1,401.6 | 1,629.8 | 1,586.7 | 479.6 |
| the parent | | | | | |
| company | | | | | |
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| Minority interest | 0.0 | 0.0 | -4.5 | 8.0 | 5.8 |
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| | | | | | |
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| Basic earnings | 0.06 | 0.07 | 0.08 | 0.08 | 0.03 |
| per share (EUR) | | | | | |
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| Earnings per | 0.06 | 0.07 | 0.08 | 0.08 | 0.02 |
| share, diluted | | | | | |
| (EUR) | | | | | |
--------------------------------------------------------------------------------
Group key figures and ratios:
--------------------------------------------------------------------------------
| | H1/2007 | H1/2006 | 2006 |
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| Scope of operations | | | |
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| | | | |
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| Net sales | 52,182.0 | 36,686 | 84,968 |
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| - year-on-year change | 42% | 35% | 40% |
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| Average capital invested | 119,007 | 55,832 | 119,783 |
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| Personnel at period-end | 1,122 | 1,127 | 1,087 |
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| Average personnel | 1,099 | 864 | 981 |
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| | | | |
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| Profitability | | | |
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| | | | |
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| Operating profit | 5,344 | 2,648 | 8,354 |
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| -% of net sales | 10% | 7% | 10% |
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| Earnings before tax | 3,820 | 2,255 | 6,695 |
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| -% of net sales | 7% | 6% | 8% |
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| Net profit | 2,670 | 1,638 | 4,854 |
--------------------------------------------------------------------------------
| -% of net sales | 5% | 4% | 6% |
--------------------------------------------------------------------------------
| Return on equity | 8% | 6% | 8% |
--------------------------------------------------------------------------------
| Return on investment | 9% | 6% | 9% |
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| | | | |
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| Financing and financial position | | | |
--------------------------------------------------------------------------------
| | | | |
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| Interest-bearing liabilities | 56,416 | 62,291 | 56,664 |
--------------------------------------------------------------------------------
| Financial assets + cash and bank | 12,843 | 16,334 | 11,506 |
| receivables | | | |
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| Gearing | 68% | 77% | 72% |
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| Equity ratio | 44% | 41% | 44% |
--------------------------------------------------------------------------------
| Net cash flow from operating | 4,312 | 1,194 | 5,756 |
| activities | | | |
--------------------------------------------------------------------------------
| Basic earnings per share (EUR) | 0.13 | 0.09 | 0.25 |
--------------------------------------------------------------------------------
| Earnings per share (EUR), diluted | 0.13 | 0.08 | 0.25 |
--------------------------------------------------------------------------------
| Equity per share | 3.16 | 2.94 | 3.10 |
--------------------------------------------------------------------------------
| Lowest share price | 3.37 | 3.38 | 3.00 |
--------------------------------------------------------------------------------
| Highest share price | 4.26 | 4.97 | 4.97 |
--------------------------------------------------------------------------------
| Average share price | 3.82 | 4.39 | 3.75 |
--------------------------------------------------------------------------------
| Closing share price | 4.20 | 3.55 | 3.42 |
--------------------------------------------------------------------------------
| Market capitalisation | 85,341 | 71,716 | 69,669 |
--------------------------------------------------------------------------------
The formulae for the key figures and ratios are available in the financial
statements section. These formulae remained unchanged during the reporting
period.
The weighted average number of shares during the reporting period, adjusted for
share issues, totalled 20,313,529. The weighted average number of shares during
the reporting period, adjusted for dilution, totalled 20,529,929. The number of
shares outstanding at the end of the reporting period was 20,319,351.
The company has no treasury shares.
The Group does not have any liabilities arising from derivative contracts.
